Platform Contracting With Developers

Anette Boom, Wolfgang Gick

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

A monopoly integrator platform contracts with two developers and sells to acontinuum of consumers. We study two contractual implementation modes betweenthe platform and the developers under adverse selection, also permitting for a de-velopment stage. Exemplifying a new “openness-versus-control” trade-off, Bayesianimplementation leads to more distortions in equilibrium. The alternative, more opencontracting mode of Pareto-dominant strategy implementation, not yet studied in aplatform context, enables more first-best outcomes under joint quality determinationand higher expected consumer surplus. Our analysis delivers a new explanation forplatform-based organizational choices.
Original languageEnglish
Publication date2019
Number of pages33
Publication statusPublished - 2019
Event 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019 - Ciutadella of the Universitat Pompeu Fabra, Barcelona, Spain
Duration: 30 Aug 20191 Sep 2019
Conference number: 46
https://www.barcelonagse.eu/earie2019

Conference

Conference 46th Annual Conference of the European Association for Research in Industrial Economics. EARIE 2019
Number46
LocationCiutadella of the Universitat Pompeu Fabra
CountrySpain
CityBarcelona
Period30/08/201901/09/2019
Internet address

Keywords

  • Platform organization
  • Openness vs. control
  • Quality and component development
  • areto-dominant strategy implementation vs. Bayesian implementation

Cite this